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Bailout bill "Emergency Economic Stabilization Act of 2008" searchable summary.

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SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION


Section 1. Short Title.
"Emergency Economic Stabilization Act of 2008."

Section 2. Purposes.
Provides authority to the Treasury Secretary to restore liquidity and stability to the U.S. financial system and to ensure the economic well-being of Americans.

Section 3. Definitions.
Contains various definitions used under this Act.


Title I. Troubled Assets Relief Program.

Section 101. Purchases of Troubled Assets.
Authorizes the Secretary to establish a Troubled Asset Relief Program ("TARP") to purchase troubled assets from financial institutions. Establishes an Office of Financial Stability within the Treasury Department to implement the TARP in consultation with the Board of Governors of the Federal Reserve System, the FDIC, the Comptroller of the Currency, the Director of the Office of Thrift Supervision and the Secretary of Housing and Urban Development.

Requires the Treasury Secretary to establish guidelines and policies to carry out the purposes of this Act.

Includes provisions to prevent unjust enrichment by participants of the program.

Section 102. Insurance of Troubled Assets.
If the Secretary establishes the TARP program, the Secretary is required to establish a program to guarantee troubled assets of financial institutions.

The Secretary is required to establish risk-based premiums for such guarantees sufficient to cover anticipated claims. The Secretary must report to Congress on the establishment of the guarantee program.

Section 103. Considerations.
In using authority under this Act, the Treasury Secretary is required to take a number of considerations into account, including the interests of taxpayers, minimizing the impact on the national debt, providing stability to the financial markets, preserving homeownership, the needs of all financial institutions regardless of size or other characteristics, and the needs of local communities. Requires the Secretary to examine the long-term viability of an institution in determining whether to directly purchase assets under the TARP.

Section 104. Financial Stability Oversight Board.
This section establishes the Financial Stability Oversight Board to review and make recommendations regarding the exercise of authority under this Act. In addition, the Board must ensure that the policies implemented by the Secretary protect taxpayers, are in the economic interests of the United States, and are in accordance with this Act.

The Board is comprised of the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of the Treasury, the Director of the Federal Home Finance Agency, the Chairman of the Securities and Exchange Commission and the Secretary of the Department of Housing and Urban Development.

Section 105. Reports.
Monthly Reports: Within 60 days of the first exercise of authority under this Act and every month thereafter, the Secretary is required to report to Congress its activities under TARP, including detailed financial statements.

Tranche Reports: For every $50 billion in assets purchased, the Secretary is required to report to Congress a detailed description of all transactions, a description of the pricing mechanisms used, and justifications for the financial terms of such transactions.

Regulatory Modernization Report: Prior to April 30, 2009, the Secretary is required to submit a report to Congress on the current state of the financial markets, the effectiveness of the financial regulatory system, and to provide any recommendations.

Section 106. Rights; Management; Sale of Troubled Assets; Revenues and Sale Proceeds.
Establishes the right of the Secretary to exercise authorities under this Act at any time. Provides the Secretary with the authority to manage troubled assets, including the ability to determine the terms and conditions associated with the disposition of troubled assets. Requires profits from the sale of troubled assets to be used to pay down the national debt.

Section 107. Contracting Procedures.
Allows the Secretary to waive provisions of the Federal Acquisition Regulation where compelling circumstances make compliance contrary to the public interest. Such waivers must be reported to Congress within 7 days. If provisions related to minority contracting are waived, the Secretary must develop alternate procedures to ensure the inclusion of minority contractors.

Allows the FDIC to be selected as an asset manager for residential mortgage loans and mortgage-backed securities.

Section 108. Conflicts of Interest.
The Secretary is required to issue regulations or guidelines to manage or prohibit conflicts of interest in the administration of the program.


Section 109. Foreclosure Mitigation Efforts.
For mortgages and mortgage-backed securities acquired through TARP, the Secretary must implement a plan to mitigate foreclosures and to encourage servicers of mortgages to modify loans through Hope for Homeowners and other programs. Allows the Secretary to use loan guarantees and credit enhancement to avoid foreclosures. Requires the Secretary to coordinate with other federal entities that hold troubled assets in order to identify opportunities to modify loans, considering net present value to the taxpayer.

Section 110. Assistance to Homeowners.
Requires federal entities that hold mortgages and mortgage-backed securities, including the Federal Housing Finance Agency, the FDIC, and the Federal Reserve to develop plans to minimize foreclosures. Requires federal entities to work with servicers to encourage loan modifications, considering net present value to the taxpayer.

Section 111. Executive Compensation and Corporate Governance.
Provides that Treasury will promulgate executive compensation rules governing financial institutions that sell it troubled assets.  Where Treasury buys assets directly, the institution must observe standards limiting incentives, allowing clawback and prohibiting golden parachutes.  When Treasury buys assets at auction, an institution that has sold more than $300 million in assets is subject to additional taxes, including a 20% excise tax on golden parachute payments triggered by events other than retirement, and tax deduction limits for compensation limits above $500,000.    

Section 112. Coordination With Foreign Authorities and Central Banks.
Requires the Secretary to coordinate with foreign authorities and central banks to establish programs similar to TARP.

Section 113. Minimization of Long-Term Costs and Maximization of Benefits for Taxpayers.
In order to cover losses and administrative costs, as well as to allow taxpayers to share in equity appreciation, requires that the Treasury receive non-voting warrants from participating financial institutions.

Section 114. Market Transparency.
48-hour Reporting Requirement: The Secretary is required, within 2 business days of exercising authority under this Act, to publicly disclose the details of any transaction.

Section 115. Graduated Authorization to Purchase.
Authorizes the full $700 billion as requested by the Treasury Secretary for implementation of TARP. Allows the Secretary to immediately use up to $250 billion in authority under this Act. Upon a Presidential certification of need, the Secretary may access an additional $100 billion. The final $350 billion may be accessed if the President transmits a written report to Congress requesting such authority. The Secretary may use this additional authority unless within 15 days Congress passes a joint resolution of disapproval which may be considered on an expedited basis.

Section 116. Oversight and Audits.
Requires the Comptroller General of the United States to conduct ongoing oversight of the activities and performance of TARP, and to report every 60 days to Congress. The Comptroller General is required to conduct an annual audit of TARP. In addition, TARP is required to establish and maintain an effective system of internal controls.

Section 117. Study and Report on Margin Authority.
Directs the Comptroller General to conduct a study and report back to Congress on the role in which leverage and sudden deleveraging of financial institutions was a factor behind the current financial crisis.

Section 118. Funding.
Provides for the authorization and appropriation of funds consistent with Section 115.

Section 119. Judicial Review and Related Matters.
Provides standards for judicial review, including injunctive and other relief, to ensure that the actions of the Secretary are not arbitrary, capricious, or not in accordance with law.

Section 120. Termination of Authority.
Provides that the authorities to purchase and guarantee assets terminate on December 31, 2009. The Secretary may extend the authority for an additional year upon certification of need to Congress.

Section 121. Special Inspector General for the Troubled Asset Relief Program.
Establishes the Office of the Special Inspector General for the Troubled Asset Relief Program to conduct, supervise, and coordinate audits and investigations of the actions undertaken by the Secretary under this Act. The Special Inspector General is required to submit a quarterly report to Congress summarizing its activities and the activities of the Secretary under this Act.

Section 122. Increase in the Statutory Limit on the Public Debt.
Raises the debt ceiling from $10 trillion to $11.3 trillion.

Section 123. Credit Reform.
Details the manner in which the legislation will be treated for budgetary purposes under the Federal Credit Reform Act.

Section 124. Hope for Homeowners Amendments.
Strengthens the Hope for Homeowners program to increase eligibility and improve the tools available to prevent foreclosures.

Section 125. Congressional Oversight Panel.
Establishes a Congressional Oversight Panel to review the state of the financial markets, the regulatory system, and the use of authority under TARP. The panel is required to report to Congress every 30 days and to submit a special report on regulatory reform prior to January 20, 2009. The panel will consist of 5 outside experts appointed by the House and Senate Minority and Majority leadership.

Section 126. FDIC Enforcement Enhancement.
Prohibits the misuse of the FDIC logo and name to falsely represent that deposits are insured. Strengthens enforcement by appropriate federal banking agencies, and allows the FDIC to take enforcement action against any person or institution where the banking agency has not acted.

Section 127. Cooperation With the FBI.
Requires any federal financial regulatory agency to cooperate with the FBI and other law enforcement agencies investigating fraud, misrepresentation, and malfeasance with respect to development, advertising, and sale of financial products.

Section 128. Acceleration of Effective Date.
Provides the Federal Reserve with the ability to pay interest on reserves.

Section 129. Disclosures on Exercise of Loan Authority.
Requires the Federal Reserve to provide a detailed report to Congress, in an expedited manner, upon the use of its emergency lending authority under Section 13(3) of the Federal Reserve Act.

Section 130. Technical Corrections.
Makes technical corrections to the Truth in Lending Act.

Section 131. Exchange Stabilization Fund Reimbursement.
Protects the Exchange Stabilization Fund from incurring any losses due to the temporary money market mutual fund guarantee by requiring the program created in this Act to reimburse the Fund. Prohibits any future use of the Fund for any guarantee program for the money market mutual fund industry.

Section 132. Authority to Suspend Mark-to-Market Accounting.
Restates the Securities and Exchange Commission's authority to suspend the application of Statement Number 157 of the Financial Accounting Standards Board if the SEC determines that it is in the public interest and protects investors.

Section 133. Study on Mark-to-Market Accounting.
Requires the SEC, in consultation with the Federal Reserve and the Treasury, to conduct a study on mark-to-market accounting standards as provided in FAS 157, including its effects on balance sheets, impact on the quality of financial information, and other matters, and to report to Congress within 90 days on its findings.

Section 134. Recoupment.
Requires that in 5 years, the President submit to the Congress a proposal that recoups from the financial industry any projected losses to the taxpayer.

Section 135. Preservation of Authority.
Clarifies that nothing in this Act shall limit the authority of the Secretary or the Federal Reserve under any other provision of law.


Title II--Budget-Related Provisions

Section 201. Information for Congressional Support Agencies.
Requires that information used by the Treasury Secretary in connection with activities under this Act be made available to CBO and JCT.

Section 202. Reports by the Office of Management and Budget and the Congressional Budget Office.
Requires CBO and OMB to report cost estimates and related information to Congress and the President regarding the authorities that the Secretary of the Treasury has exercised under the Act.

Section 203. Analysis in President's Budget.
Requires that the President include in his annual budget submission to the Congress certain analyses and estimates relating to costs incurred as a result of the Act; and  

Section 204. Emergency Treatment.
Specifies scoring of the Act for purposes of budget enforcement.


Title III--Tax Provisions

Section 301. Gain or Loss From Sale or Exchange of Certain Preferred Stock.
Details certain changes in the tax treatment of losses on the preferred stock of certain GSEs for financial institutions.

Section 302. Special Rules for Tax Treatment of Executive Compensation of Employers Participating in the Troubled Assets Relief Program.
Applies limits on executive compensation and golden parachutes for certain executives of employers who participate in the auction program. 

Section 303. Extension of Exclusion of Income From Discharge of Qualified Principal Residence Indebtedness.
Extends current law tax forgiveness on the cancellation of mortgage debt.


From House Speaker Nancy Pelosi

Summary of the "Emergency Economic Stabilization Act of 2008"

I. Stabilizing the Economy

The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets.

II. Homeownership Preservation

EESA requires the Treasury to modify troubled loans - many the result of predatory lending practices - wherever possible to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control. Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.

III. Taxpayer Protection

Taxpayers should not be expected to pay for Wall Street's mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program by charging a small, broad-based fee on all financial institutions.

IV. No Windfalls for Executives

Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses. In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In addition, the bill limits "golden parachutes" and requires that unearned bonuses be returned.

V. Strong Oversight

Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse.

25 Comments

The reality is the entire financial system is unwinding completely. The bail-out will not work. The only chance for saving the day is to repeal the Federal Reserve charter and put the entire [American part] of the $1 Quadrillion derivatives bubble into bankruptcy. It is sounding like some in the EU would support this and possibly join us. I am sure parts of Asia would (starting with Malaysia who has spoken out against the madness in the past and Thailand who has gotten screwed by roving hedge funds). Members of German parliment are organizing in the EU to destroy the Anglo-Saxon financial system. Now if overdone this could lead to socialism, but we could do it our way (keep it capitalist), but reach out to them on the principle of destroying this "anything goes", laissez-faire, gambling at all costs (with taxpayer bail-outs) ideology. Let's recreate a financial system that supports an economy based on adding value to the physical world rather than emphasizing trading in bits of paper. In other words let's return to manufacturing, agriculture, and technology as the main basis of our economy. Let's give some protection to some key industries (such as energy development) so we do not need to fight wars to drive our SUV's. Let's have some minor tarrifs on products that force Americans to compete against $3 a day labor. Let's try and keep the good parts of global trade alive, but not let it destroy our lives.

At the same time the economy is still struggling along. The physical world has not changed much: houses still stand and many are occupied. Cars dirve around. Farmers are farming, steel is being produced, etc. This is a failure of the monetary system only, so it is the monetary system that needs to be changed.

www.FinancialBlackmail.US

I believe it is wrong to bail out these institutions. They have gotten themselves in trouble and need to get themselves out. Just delaying things with this bill does'nt help anyone. If the market is going to fall, let it fall and get it over with. I personally don't believe that will happen.
Taxpayers should not be forced into bailing out big businesses who got themselves into trouble. NO one came to the rescue of the homeowners and small business persons who lost everything. And now your asking us to bail these people out and support their style of living ? How outrageous!

Mark has heard the word "derivatives and, without having any idea what they are (most are hedges of one kind or another), decided they are bad and all must be eliminated.

A little too simplistic, Mark. In fact, derivatives serve a useful purpose, although some can be subject to abuse.

In fact, as a result of capital requirements placed on financial institutions by regulations (which, in my view, are very necessary), and the inability of these financial institutions to ascribe any value to their securitized mortgage derivatives, we faced a liquidity crisis. Which is also what caused the Great Depression.

So, Mark, good try but you -- like most people -- have no idea what you are talking about. Your solution would not resolve anything but cause even more chaos than another Great Depression.

So much for "affordable housing".

In the twisted dreams of Barney Frank, Maxine Waters and Chris Dodd, we forced banks at the point of a gun to give loans to people who were in no way qualified to receive them. When are we going to stop this sort of egalitarian madness? We tore down entire sections of cities in the name of "urban renewal" in the hopes of building beautiful, gleaming cities where once only slums existed. Instead, we created rot-infested sewers of violence and anarchy. Now, 50 years on, we've done the same thing again, but this time the government culprits are hell-bent on taking down the whole economy with them. With the "affordable housing" gambit, we were going to make home ownership as easy and renting, and in the process, devalued both.

Chris Dodd, Barney Frank, Maxine Waters and the entire cast of criminals in the house Financial Affairs committee belong in orange jump-suits stamping out license plates. This thing is an outrage, and it will fix nothing. Unless fixing a fire can be accomplished by pouring on gasoline. This is the kind of nation-sized crime by the governing class that sparks revolution.

God help us all, and I mean that.

BAsically i am aganst the bailout. It is socialistic in content and in future implications. WE need mark to market accounting. Mark to model or mark to whatever is a lie and goes aganst transpancy in financial statements. Basically we are doing the same things that got us in this position. WE are still selling derivitives and the 700 billion will prolong the pain until the new president is in office. How nice just like wimpy politicians. I expected nothing less. The warrants are dilutive to the shareholders, however the devil is in the details and they will probably expire worthless anyway. show us the details. Poor job guys and gals. Not acceptable to taxpayer

Mark is correct. It is too late. The system is bankrupt.

What a mess the Federal Reserve and its fractional reserve monetary system has created.

It is time to start backing up the currency with Gold/Silver, at least to some degree, per the Constitution.

I agree with Mark.

Section 113 is one of the most important sections,
and the description above omits the most important detail in it.

This article/blog post summarizes it as
Section 113. Minimization of Long-Term Costs and Maximization of Benefits for Taxpayers.
In order to cover losses and administrative costs, as well as to allow taxpayers to share in equity appreciation, requires that the Treasury receive non-voting warrants from participating financial institutions

But subsection (d)(2)(E) says that the strike price for these stock warrants can be whatever the Treasury Secretary is willing to negotiate. But unless strike price is close to zero, there is no way that the govt can recover any overpayment that will enrich the stockholders of these financial firms. Yet the stock/equity provisions are what supposedly made the Democratic alterations to Paulson's original proposal something other than a complete give-away to financial firms.

attention to section 132. The SEC can allow the banks and other financial entities to return to false and misleading accounting. My god, permission to fabricate and lie? That translates into bilk and steal.

"Section 132. Authority to Suspend Mark-to-Market Accounting.
Restates the Securities and Exchange Commission's authority to suspend the application of Statement Number 157 of the Financial Accounting Standards Board if the SEC determines that it is in the public interest and protects investors."

It appears the worst abuses may have been dropped from this draft but I hope somebody can look out for any reappearance of the original weasel words that allowed more than the $700 (was actually unlimited) and words that shielded the foxes from any oversight whatsoever. Such abuses would be fatal for the American people and must be guarded against at all costs. Note section 108 on Conflict of Interest is very slimy and can only make a bad plan worse.

I call your attention to section 132. The SEC can allow the banks and other financial entities to return to false and misleading accounting.

My God, permission to fabricate and lie? That translates into bilk and steal. That should take maybe 2 minutes.

Expression your opinions io your representatives on this. Keep after them.

The Glass-Steagall Act must be activated again immediately. Don't let the mega-financial institutions buy up your bank and use your bank deposits for speculation in the markets. Mark at 4:26 above is correct: handle the financial toxic waste with bankruptcy.

This situation is orders of magnitude above what FDR faced, but the same principles apply in turning it around: get back to supporting a physical economy.

This represents a continued failure to understand the nature of our economic contraction. The problems of the economy generally stem from a failure of SAVINGS (meaning, the opposite of consumption), which are the source for future investment. Savings, turned into investment in new enterprises, is the source for new industry and new jobs. You cannot create wealth by borrowing, and there are sufficient lenders to lend to credit worthy borrowers (e.g., Wells Fargo Bank). The contraction of credit is due to having purchased too much on credit in the past, which has weakened current balance sheets to the point where further borrowing is not possible because lenders would fear a lack of repayment.

This is commonly referred to as a "lack of solvency" as opposed to a "lack of liquidity" which the current bailout is supposed to address.

As for the bailout, the idea that the Treasury would make another $700 B of taxpayer funds (the government is already running a deficit)to the banks and investment banks which were the cause of this credit contraction because of their deficient management, is preposterous. These organizations need to go out of business. And that will not "cause" a recession. If we have a recession (which seems inevitable), it will be because of bad Federal Reserve policies which generated excess lending (primarily to the housing industry). The idea that government is going to "solve" the crisis, when it caused the crisis by interfering in the credit markets, is crazy.

John B. Goodrich
650 851-8890

Thanks congress. In one swoop you have abandoned the Constitution & rewarded the whole crooked empire by allowing the return to hidden accounts under section #132 of this bill. Welcome to the USSA.

This is a bad deal. Every word of this summary speaks to establishing layer upon layer of oversight and regulation of the assets after they have been purchased at inflated values. The fact that these assets are already devalued and the resale strategies are based on auctions of any kind leave little confidence in consumers expectations that they will ever fully recoup the value of investments.
These "toxic securities" are the result of unmitigated greed by financial institutions and a complete lack of any oversight or regulation to prevent these excesses. And EESA provides no guarantees that these institutions, once balance sheets are restored will not return to these predatory practices that are fueled by obscenely lucrative executive compensation programs.
Certainly these institutions have proven that federal regulators are no match for their creativity and guile in constructing financial instuments that can skirt the fringes of any federal regulations and fool the savviest of investors.
A recent report stated that Executive compensation in the 5 largest Wall Street Banks sacked the american taxpayer for $56 Billion in 2007. In the 2nd quarter of 2008 750,000 americans lost their homes and had their personal credit irrevocably damaged to ensure an inability to ever obtain another mortgage. And our government's answer to this crisis is to bail out these thieves with taxpayer dollars,and increase our national debt by a trillion dollars??
We have been assured by our President and Congress that failure to act will result in an even greater crisis as lenders cut off the financial bloodflow to Main Street America and our pension funds and 401Ks disintegrate to worthless paper. They are also certain that foreign investors will immediately transfer their remaining assets to foreign markets and leave the coffers of American banks empty and start a domino effect of bank failures like the world has never seen. But what safe haven is out there for these investors?? Isn't it true that the tides of these foreieign markets also rise and fall based on the stability and health of the world's largest market, our own. And who is going to be the first to blink?? No I don't beleive for a second that larger investors will risk tipping these scales and start a chain reaction that will lead to a worldwide depression. Last week $500 Billion of $4 Trillion in Money Market funds was withdrawn from these markets. Is that the beginning of the end or the beginning of the beginning of restoring a balance of worth in financial markets to equities and bonds that are secured by real assets rather than the "air" that fills the overinflated baloon of the mortgage marketplace.
If the American taxpayer is going to take these "toxic securities" off the balance sheets of these Wall Street megagiants we should only agree to do it at drastically reduced prices that will penalize them for their years of gluttony and add some assurance of our ability to ever recoup the value of our investment. We should be agreeable to saving them from extinction but we shouldn't be doing anything to assure that they'll still be able to hide their Lamborghinis and Island Villas under the tree this Christmas.

How do they know this gone work? And behind closed door? Sounds like shadow boxing to me

BRAVO BRAVO to John Arens comments above!
You are correct!! These 'gang of thieves' (as we saw them march triumphantly to the press podium last night on the 'liberal media' stations). Pounded their respective chests saying 'they' were going to SAVE THE COUNTRY.
PHOOEY.
These are the very people WHO CAUSED this situation! Their hands are so deep into the pockets of the Fannie mae's and Freddie mac's that you can't see their shoulders.
I say, let the FREE MARKET WORK!
Will there be problems? YES.
Will people loose money and possibly their homes? YES.
Will it take time to recover? YES.
But then that's what's suppose to happen. It's called 'RESPONSIBILITY'. Accept the consequences of your actions. (I do and always have)
In the long run, we ALL be stronger and 'FREE' and that's the AMERICAN WAY!!

This BILL is a BAD IDEA and sould NOT BE PASSED.

Next step, PROSECUTE THOSE IN CONGRESS, who's had their hands in the till. IMPEACH, IMPRISON or throw them OUT!
It's up to US.

Any Congressperson who votes for this bill should be impeached for treason. It appears it is way past time to abolish the illegal Federal Reserve and their Wall Street masters. As far as Paulson, he's a joke.

This may appear to simple but I blame the tax system, it is in fact un-Constitutional, it has given too much power political and otherwise to the corporations. Suppose the Congress were to have used lawful Tarriffs instead of an unlawful income tax as imposed by the IRS. What would one expect, noting the corporate take over of the USA, and in large part because of the IRS “income” tax (income must be taxable as an excise see Brushaber infra) enforced the IRS, which of itself is not of the Department of Internal Revenue. In fact the corporations do not pay a tax, noting that all expense is passed to the price of the product and to the consumer as an excise tax, note the reason for the “income tax” is not to raise revenue for the government but rather to keep the peeps in the box, and easily done with a screw your neighbor kind of mentality. Note the 16th Amendment did not give the Congress any new taxing powers, see Brushaber v Union Pac R. 240 US 1, 11(c), 17,( 1916) Stanton v Baltic Mining 240 US 103, Chas Steward v Davis 301 US 548, 581-582, 583(2) (1937), that a tax on personal income is a poll tax, and absent an apportionment is unlawful in the USA, that as the interest on a State bond issue is a tax on the bond itself, Chief Judge Fuller of the Pollock v Farmers Loan 157 US 429 (1895), these cases have withstood the test of time. And does anybody really believe the bailout is because of some big mistake. Read Pollock v Farmers Loan supra for insight to the lawful taxing power of the United States. Don’t take my word for it look it up for yourself. TR without prejudice

brush me astonished ; the speed that this bill was prepared....

i suspect that long ago the treasury department and the banking department and the executive branch had been preparing for the events that have taken place in the past two weeks..

I don't know much. But why is it that every voice of rejection I hear seems to not know what they are talking about and is filled with anger? And why is it that every figure of respect in the financial world seems to say that this bill is needed.

I don't think the US Treasury, the Federal Reserve, and the prominent politicians who back the bill have any interest in bailing out companies. Especially with all opposition from the public it seems like a lot of heat to take. What do they gain by defying the public outcry?

Don't you think both Presidential candidates would have loved to oppose this bill and side with the general public who view this as a 'Bailout'? But they both felt absolutely compelled to back it.

I don't believe in bailing out corporations. And I believe there should be consequences for bad choices made. But I don't think I should have to suffer just so they can be punished.

Again,...I don't know much but I do hear a lot of smart people are for this bill. They say that things will get much worse if this bill doesn't happen. And all I hear from people who are aginst it is anger and a lack of knowledge about the facts. I have not heard one person who is against this bill say that they have a better idea. Or, been able to argue why this would not work. At least no one with any credibility. Just a bunch of angry people who don't make sense.

How to deal with the crisis:
1). Inject the $700Bn directly into the banking system; forget the mortgage buyback.
2). Kill mark to market accounting;
3). Congress..get rid of SOX legislation;
4). Kill the forced community development programs (i.e. affordable housing..translation - subsidy);
5). Put in an Inspector General office to investigate the false claims of recent bankrupt CEOs;
6). FDIC - increase the backstop to $250K;
7). Energy - go to nuclear power;
8). Vote McCain, not the best choice but the other guy is clueless.

The issue is the lack of capital for some groups investment and basically FEAR for letting loose of more capital.

Cut capital-gains tax to incentivize, modify accounting methods to allow companies time to defer payments until they can recover losses suffered from the bad loans.

Let the REALLY bad lending institutions LOOSE. Let them die and have to sell their loans or even give their loans to companies who are managed better.

Keep the Government out of this. People love to make this reference and I hate it, but remember Vietnam, when Politicians tried to run a war because they didn't trust soldiers? This is a similar situation. Some companies made bad decisions and now we're looking for Politicians to LEAD? Paulson has motives for his actions which are not altruistic and the majority of the people supporting this were the ones cramming central housing authority down our throats by forcing Fannie Mae to make bad loans just so "everyone" could experience "home ownership". That is the reason we're in this mess. But really, "we're" not in it yet. The credit industry who has prayed on the public for many years is reaping what they sowed.

One of the scariest sections I see above, which stands out and reeks of what politicians do to bills is this one:

Section 107. Contracting Procedures.
Allows the Secretary to waive provisions of the Federal Acquisition Regulation where compelling circumstances make compliance contrary to the public interest. Such waivers must be reported to Congress within 7 days. If provisions related to minority contracting are waived, the Secretary must develop alternate procedures to ensure the inclusion of minority contractors.

This basically is giving the Secretary (who really is too busy to deal with contractors and will pass this on to someone lower down), the right to award government contracts to anyone and only to "notify" congress within 7 days (like in a letter mailed to a PO Box).

This is really, REALLY, scary.....

IF YOU ARE ABOUT TO LOSE YOUR HOME THROUGH
FORECLOSURE CALL JOHN MCCAIN, HE CAN'T HELP YOU
BUT HE WILL LET YOU DOWN EASY!
SUPER JOHN THE MAN WHO PUT HIS LOSING CAMPAIGN
ON HOLD TO HELP WHOM I DON'T KNOW!
MCCAIN YOU SHOULD HOOK UP WITH A MOVIE PRODUCER
AND MAKE B MOVIES AFTER THIS LOSS!

Just a concern, the 6 page summary of the 400+ page document only refers to Title III Sec. 301, 302, and 303. Meanwhile, Title III has 325 sections. Some of them are quite interesting and their purpose is not entirely clear.

It's clear now that the Act was never intended to put a floor under assets--there isn't enough money allocated to do that. Let's hope that the quick infusion of liquidity and the guarantees for liquid assets will be sufficient to avert total panic.

The only good that will come out of this episode is that it came to light before the election.

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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